What Is The Legal Angle?

Buyback of shares is initiated via a special resolution of the shareholders of the Company or a Board resolution, depending on the percentage of shares to be bought back, and then a public announcement should be made, followed by disclosures and draft letter of offer filing with SEBI. This letter of offer would then have to be sent to members of the company. Also the buyback offer shall remain open for a period of not less than 15 days and not more than 30 days. But the biggest question remains; whether there is some minimum limit up to which a company has to buy-back? As far as legal requirement is concerned, though there is no mandatory methodology purported by SEBI for computation of the minimum limit, yet the same
AKItA AGRAWAL has to be specified in the buyback offer document.
Pnrtna, Amarchand
Mangaldas "These days SEBI has given clear indication to Companies that they should disclose and agree to
acquire a minimum number of shares pursuant to a buy back offer. The SAT judgment in the case of Sasken Communication Technologies Limited makes it clear that a minimum offer size has to be disclosed and this minimum offer size is usually taken as 1 % of the maximum number of shares to be bought back. However, it is possible for a Company to insert a condition in its offer document that any obligation to acquire the minimum number of shares is subject to such shares being tendered at or below the maximum price offered by the Company." says Akila Agrawal, Partner, Amarchand Mangaldas, a renowned legal firm. "Considering that Companies usually draft their offer documents with adequate legal safeguards, in the event that the market price of the shares continues to be higher than the maximum price offered by the Company, it is possible for them to make a case as to why the minimum number of shares were not acquired in the course of the offer." she adds. Now if that is the legal position of buyback offer then it is of utmost importance that investors should pay proper attention to the offer document to protect their interest and should not invest in companies blindly based upon just buyback cues.

Buyback: Guarantee For Growth

Though in 2008 many companies management were tempted to go for the buyback yet if we analyze the performance of "serious" companies on the bourses then buyback exercise could certainly be a guarantee for upside movement. Serious in the sense as these are the ones which have completed 100% buyback exercise in terms of the value. If we go by the growth of these 12 companies from Dec 08 to Dec 08 then they are well ahead of the growth given by other scrips. In fact in comparison to Sensex, which zoomed past around 94% during this period to touch 17198 points on December 1,2009, only one company, Le. R systems was limping behind it with around 74% growth. Otherwise it was the feast for the investors as all other 11 counters posted whooping growth numbers. In fact companies like Patni computers and supreme industries smacked 225% and 196% in return respectively, clearly indicating the positive sentiments for these companies on the bourses.

Euromoney recognizes Hatton National Bank

Hatton aitonal Bank of Sri Lanka was recognized as the best bank in Sri Lanka by international finance magazine Euromoney at the Euromoney Awards for Excellence 2009 Asia Dinner in Hong Kong. Euromoney praised the bank for being able to post solid results during an economic backdrop that arguably worsened and a political situation that stabilized towards the end of the review period. Rajendra Theagarajah, managing director and CEO of Hatton National Bank, received the award from Euromoney Magazine managing director Simon Brady.

South Indian Bank bags Best Bank award ~ South

Indian Bank won the best bank award in the traditional bank's category at
the 10th Financial Express awards for India's best banks selected by Ernst & Young. Pranab Mukherjee, union finance minister, presented the award to Dr VA Joseph, managing director and CEO of the bank.

MCX Stock Exchange has signed a cooperation agreement with ITSE

MCX Stock Exchange has signed a cooperation agreement with ITSE, the global index provider, which will bring a range of international as well as new domestic indices to the Indian market. Seen on the occasion of the signing ceremony (L to R) are U. Venkataraman, executive director, MCX Stock Exchange; Donald Keith, deputy chief executive, ITSE; Jignesh Shah, vice chairman, MCX Stock Exchange; Paul Hoff, managing director - Asia Pacific, ITSE and Khozem Merchant, deputy chairman, Pearson India

Cisco Capital sets up office in Dubai

Capital has launched a captive financing arm in Dubai to serve Gulf, North Africa and Central Africa. Seen on the occasion are (L to R) Marwan Lootah, chief ClJ •• 'orate affairs officer, DIFC Authority; Amna Al Sayed, CEO, DII·c.. Global; Wayne Hull, general manager, CISCO Capital UAE; HE Dr Omar Bin Sulaiman, governor of the DIFC; Sam Kharrat, managing director, CISCO Capital, Gulf & Pakistan; David Clark, senior executive officer, CISCO Capital, UAE and Abdulla Al Awar, CEO, DIFC Authority.

~ Alok Kumar Misra is CMD of Bank of India

Alok Kumar Misra has assumed charge as chairman and managing director of Bank of lridia. Prior to being appointed CMD of Bank of India, Misra had been CMD of Oriental Bank of Commerce. Earlier, he was executive director of Canara Bank and held several senior positions induding managing director of Indo-Zambia Bank, a joint venture between Bank of India, Bank of Baroda, Central Bank of India and the government of Zambia. A post-graduate in statistics from Lucknow University, CAl!B, fellow of the Certified Institute of Bankers of Scotland and a post-graduate diploma holder in personnel management, University of Delhi, he began his career as a probationary officer